Starting as a new seller on Amazon can seem extremely overwhelming – so much so that most people who think about selling on Amazon never get past a quick search for ‘how to sell on Amazon’. They don’t even take the time to set up an Amazon seller account.
But the truth is that getting started selling on Amazon isn’t that difficult. This step by step guide is going to walk you through the entire process – from how to set up your account correctly to getting and listing your first products.
If you follow the steps in this guide, you will be set up to get your first sale on Amazon – and you can complete the steps in the next day or two.
For this reason, I encourage you to commit to following these steps right now. There is no risk to experimenting with selling on Amazon but there is a big opportunity to be missed if you never try.
The potential upside to becoming an Amazon seller is huge and only limited by your own goals. With that in mind, let’s get started…
- How much can you make selling on Amazon?
- How much money do you need to start selling on Amazon?
- How Amazon works
- How to sell using FBA (Fulfillment by Amazon)
- How to set up your seller account
- The Amazon Seller App (free product analysis and profit calculator)
- Finding products to sell on Amazon
How to Start Selling On Amazon (Overview)
Even if you are starting from scratch, the process of getting started on Amazon isn’t as hard as many people think. Here are the main steps you will need to take:
- Review the sourcing strategies you can use to get products.
- Learn the rules (and fees) for selling on Amazon.
- Register for an Amazon seller’s account.
- Obtain your first products to sell.
- Create your first product listing.
- Ship your products to FBA warehouses (or fulfill orders yourself).
If you take these six steps, you will get your first sale. Once you do that, growing that start into a successful business is just a matter of reinvesting and repeating steps 4 through 6 over and over again.
Step 4 is what trips a lot of people up. Later in this guide, we’ll cover a product sourcing strategy that will allow you to find your first products to sell this week in your local retail stores. This strategy is called retail arbitrage, and I owe the initial success of my business (and over 7-figures in sales each year) to it.
How Much Can You Earn Selling On Amazon?
One of the main questions people have before getting started on Amazon is ‘how much can I earn as an Amazon seller’.
The answer to this question is different for everyone and largely depends on what your goals are and what you want to sell. There are people who make next to nothing, and there are others who make 7+ figures in profit.
But in general, my experience suggests that earning a comfortable living is well within the capabilities of the majority of people who invest the time needed to build a successful business.
To give you a better idea of what is possible when you sell on Amazon, I’ll share some details from my own experience.
My Experience Selling On Amazon
I lucked into selling online early when I got a bad offer at textbook buy-back even while I was in college. I decided to try selling them online instead, and soon I was buying other people’s books from them to sell online as well.
In the early days, I didn’t treat selling online as seriously as I should have because I didn’t appreciate how much I could earn. It took several years and a lot of discontent at the accounting job I took after graduating to make the jump into selling online full time, and when I did that I was able to earn $16,376.35 profit in my first three months (Q4 2013).
This business has been supporting me ever since.
During the last 6 years, I’ve learned many things that have helped my business succeed well beyond what I thought was possible in the beginning. 2015 was our first year doing over $1 million in sales on Amazon, and this year we’re on pace to do over $7 million!
So it took me about five years to take the plunge and do it full-time, and within two years of doing so, I was able to exceed a million dollars in sales.
I offer a variety of training programs that are designed to help make this process faster for you – the best one to start with is a free presentation on what I believe are the 7 keys to building a 7-figure online retail business where I go into more detail about how I got my start and all the strategies that I’ve used to grow my business.
How much money do you need to start selling on Amazon?
A question that goes hand in hand with the first one we discussed (how much can you earn) is ‘how much money do I need to start selling on Amazon’.
You can start selling on Amazon with whatever amount you can afford to invest – even if that amount is under $100. Using retail arbitrage as your beginning sourcing strategy allows you to start with even just 1 or 2 products that you source from local stores, and as long as you continuously reinvest 100% of the profits early on, you can turn that small start into a full-size business.
With that being said, there is a reason I said that you can start with “whatever amount you can afford to invest”. The more capital you have, the more inventory you can afford to buy. More inventory means more potential sales, and more potential sales means more potential profit.
You should not use leverage (debt) in order to start bigger than you can actually afford to do. Even if you don’t have a dime, you are better off taking on the flipping challenge and using that as your starting capital. The idea behind the flipping challenge is to start with $0 and 5 items you pick from things you already own, then turn those 5 items into $1000+ within 90 days. You can read a recap of one of my team member’s successful flipping challenge here.
So not having money shouldn’t prevent you from getting started. Starting with a couple hundred dollars for inventory and $39.99 to invest in a professional sellers account (more on this below) would be even better, but starting now is much better than waiting!
Selling on Amazon for Beginners (How Amazon Works)
Before we dive into how to set up your account and how to find products, let’s take a minute to go over how Amazon works.
Here’s what a product listed on Amazon looks like. I’ve added some arrows to draw your attention to some details that you may not have paid much attention to as a buyer:
There are a few noteworthy items in this screenshot:
- The arrow and underlined name in the center of the screenshot is a “3rd Party Seller” on Amazon. If you start selling on Amazon, you will also be classified as a 3rd party seller. They are in what is known as the “Buy Box.” What this means is that when a buyer clicks the “add to cart” button” it will be this seller’s item that is added to the cart to purchase. In this case, the seller in the Buy Box is ROLANDA.
- The seller that is in the buy box has their listing “Fulfilled by Amazon.” This means that Amazon will handle shipping this item to the customer. We’ll get into more details on what Fulfillment by Amazon means shortly.
- On the right-hand side of the screen, you can see that there is a section with “Other Sellers on Amazon.” This section also displays 3rd party sellers on Amazon, however, these sellers aren’t in the “buy box.”
- You might notice that “Amazon.com” is not listed as a seller in either the buy box or the other sellers sections. On many products, you will see Amazon.com listed as a seller of the product you are looking at. Generally speaking, 3rd party sellers see better sales on their products when Amazon.com is not a seller on the same item.
When you sell on Amazon, your item will be displayed in either the buy box or in the other sellers section of the Amazon product detail page.
Generally, there are only 3 different sellers shown in the other sellers section on the main product detail page. If there are more than 3 other sellers, which is very common, then the buyer will have to click to view all of the available offers to see every seller who is on the listing.
It’s also important to note that all sellers for the same item display on the same product page. If you’ve sold on eBay in the past, then this will be a bit of a change. When selling on Amazon, you are able to add your product offering on the same product detail page as other sellers. On eBay, you have to create your own listing.
In the case of the Catan board game above, there are 81 total sellers that have this item for sale at the time of the screenshot. The buy box seller and the other sellers section are the only sellers who are featured at the current time.
Getting the buy box is a key part of seeing success on Amazon. The exact algorithm is not known, but 3 of the top factors you can control are your price, your feedback rating, and your fulfillment method.
The fulfillment method is very important for maximizing your results on Amazon. Using Fulfillment by Amazon as your fulfillment method will be one of the best things you can do to generate sales when selling on Amazon.
How to Sell on Amazon using FBA (Fulfillment by Amazon)
I just mentioned that Fulfillment by Amazon will most likely be the best option for you to fulfill your products, so let’s walk through how selling on Amazon FBA works.
- Find a product that you want to sell on Amazon.
- List the product for sale on Amazon.
- Prepare your items for shipment.
- Box up your items and ship them to the warehouse location that Amazon assigns during the listing process.
At this point, your work is just about done with the product. Here are the steps that Amazon will take once the items arrive at their warehouses:
- Verify that you have sent the correct items in the proper condition.
- Upon verifying the items are correct, Amazon will activate your listings. This means that your seller name will appear on the applicable product detail page, and your item will be available for sale.
- Amazon will store the item in their warehouses until a customer orders it.
- When a customer orders the item, an Amazon team member will ship the item to the customer.
- Once the item has shipped, Amazon will deposit your share of the sale into your seller account. Your share is the selling price less Amazon’s fees. You will receive an email from Amazon every time they ship an order for you.
- Every 2 weeks you will receive a deposit to your bank account for items that have sold for the prior 2 weeks.
Essentially, you are responsible for finding items to sell and getting them to Amazon. After that, Amazon takes care of the rest of the process. We’ll be talking about finding products to sell later in this guide.
What Are the Benefits of Using the Fulfillment by Amazon Program?
There are a few key benefits to selling on Amazon using the Fulfillment by Amazon program.
The biggest one that impacts Fulfillment by Amazon sellers is the free shipping benefits offered to customers:
The screenshot above takes a look at some of the benefits that shoppers on Amazon have who are a part of the Amazon Prime program. Amazon is rolling out some additional benefits and now offers free one day, same day, and 2 hour delivery on certain items in select cities.
When you sell on Amazon using the Fulfillment by Amazon program, your items are available for all of these prime shipping benefits. That means customers can get Free Two-Day Shipping on the items that you sell.
The fast shipping times are very appealing to customers and make them more likely to purchase an item from you versus a seller whose item is not available for prime shipping.
In addition to the fast shipping, customers also know that items that are shipped via Prime will have the same return policy as items that are sold by Amazon.com themselves.
What this means is that customers can be extremely confident that their items will arrive exactly as described and when expected. In the unlikely event that their expectations are not met, then they know that Amazon’s customer service will get the issue resolved for them.
The extreme confidence that customers have in the program are 2 major benefits that will help your items to sell faster.
The other key benefit that I will mention is that Amazon does most of the heavy lifting when you use the Fulfillment by Amazon program when selling on Amazon. You are able to ship items to Amazon in bulk, and they handle getting the items to the individual customers.
Fulfilling Your Own Orders On Amazon (Merchant Fulfilled)
I mentioned above that there was another option when selling on Amazon that does not require you to use Fulfillment by Amazon. The other option is to “merchant fulfill” the items you sell on Amazon.
This means that you will keep the items you have for sale at your location and when an order comes in, you will ship the item directly to the customer. There are times when this can make sense, but 99% of the time using Fulfillment by Amazon will be a better option.
The main time that my business considers fulfilling our own orders is at the end of Q4 when there isn’t time to get an item shipped to an FBA warehouse in time for the item to be listed and sold before the holidays. In this case, it sometimes makes sense to ship our own items to enable customers to get their products before Christmas by eliminating the shipping to Amazon step and the processing time that comes with it.
So “merchant fulfilling” is an option, but for the remainder of this post, we’ll focus on selling on Amazon using the FBA program.
Now that we have an overview of how the process works, we’ll get into the details of how to set up your seller account, how to know how much you will get paid for items that sell, how to find items to sell, how to price your items, how to get your items to Amazon FBA warehouses, and what you can expect once you have items for sale on Amazon.
How to Set Up Your Amazon Seller’s Account
In order to start selling on Amazon, you need to register for an Amazon Seller’s Account – this is separate from your regular Amazon account that you use to buy stuff.
This section will walk you through the process of registering for an account.
Step 1: Visit services.amazon.com.
When you click that link, you will be taken to a page that looks like this:
If you click the big “Start selling” button, you will begin the registration process for a professional account.
Your other option is to scroll down the page and look for this link:
As the link implies, this will get you an individual seller account.
Step 2: Choose between an Individual and Professional Account.
There are a couple important differences between these two account types.
The first is that the Professional account will cost you $39.99 a month while the Individual account is free. While each option involves additional fees, the Individual account has a $0.99 per item fee when your items sell that is not included on the Professional plan. So selling 40+ items a month automatically makes the Professional account the better deal.
The other big difference is that you have to have a Professional account to get the “Buy Box”.
Like we discussed earlier, being in the Buy Box means being the seller whose inventory is sold when a customer clicks the default Add to Cart or Buy Now buttons on Amazon:
If you have done any shopping on Amazon, you can probably imagine how important the buy box is to sellers. Many people don’t even realize that you can chose to buy from other sellers by looking for the “Other Sellers On Amazon” box:
On top of this benefit, the Professional plan unlocks the ability to apply to sell additional categories and products. Each product on Amazon has a category (and subcategories), and many categories are restricted to new sellers until you apply.
You can see a products main category on the product page by looking in the ‘Product information’ box:
You can learn more about which categories need approval and which ones don’t by visiting this page on Amazon.
So to recap, a Professional account:
- Costs $39.99 a month.
- Removes the $0.99 per item sold fee.
- Unlocks the ability to earn the Buy Box.
- Unlocks the ability to apply for to sell in more categories.
In the long run, it will definitely make sense to have a Professional account.
It is okay to start with an Individual account if you don’t want to spend the $39.99 and just want to test it out, but keep in mind that your sales will be limited due to not being able to get the Buy Box. You can upgrade to the Professional account at any time though, so as usual, starting now is better than waiting, even if that means not getting the Professional account yet.
Step 3: Complete the account set-up forms.
The first page that you will come to looks like this:
A lot of people see the “Legal name” box and assume they need an LLC or some other incorporation status. While getting an LLC is something I recommend setting up over time, you are perfectly fine to just enter your own full name here. This is what Amazon says about the subject:
You’ll notice that you have to check a box that says “I have read and accepted the terms and conditions of the
Amazon Services Business Solutions Agreement”.
While it can be tempting to just check that box and keep on going, I recommend taking the time to actually read the document. Yes, it is long and boring. It is also important.
Once you do that, you’ll be asked for your address, display name, and phone number. They’ll also ask you for a website, but you don’t actually need one and can leave this blank:
After this, you’ll need to fill out some bank account and tax information, and then ideally that’s it – you’ll officially have an Amazon selling account. In rare instances, you will get a message that they have decided to not issue you an account or need further information. It is important for the information you supply to match – meaning that your name and address are the same across the application and the forms you submit.
The Amazon Seller App (Free Profit Calculator)
Once you set up your seller account, the first thing that I would recommend doing is to downloading the Amazon Seller App.
This is a free app that is available directly through Amazon that gives you product details like the selling price, fees, and other details for any product that is available on their website. The app is synced directly to your account, so it will also tell you if you are allowed to sell a given product or if it is restricted.
To find a product, you can search for it by name or UPC, or you can use the camera on your cell phone to scan the barcode of the product. The app will then show you the pricing and fee information for that product.
This ability to scan products will come in very handy when performing retail arbitrage to acquire products.
If you haven’t yet set up a seller account and want to look up the profitability of an item, you can use the Fulfillment by Amazon Revenue Calculator to get the fee details on any item. Here’s a look at an example product:
If you go to the Fulfillment by Amazon Revenue calculator, you will be able to search for any item that you are considering selling on Amazon. You will then enter the price (red arrow), how much it will cost you to ship to Amazon (black arrow), and how much the product costs you (green arrow). The calculator will display exactly how much you will be charged in fees, and most importantly at the bottom will display exactly how much profit you can expect to make on that item.
I recommend running every single item you sell on Amazon through this calculator or a different tool that serves the same purpose. With calculators like this available, you should know exactly how much you can expect to profit on every item that you are selling on Amazon.
Now that we have a tool that shows us how the fee structure works when selling on Amazon, we need some items to sell.
Finding Products to Sell on Amazon
There are three main ways to find products to sell on Amazon. They are:
- Retail Arbitrage
- Having your own products manufactured
These are all strategies for obtaining NEW items to sell. While you can sell used items on Amazon, most buyers use it to buy new items and I’ve had more success selling used items on eBay or local marketplaces. Flipping used items is still a great way to make money, I just don’t recommend selling those used items on Amazon.
So when it comes to getting your first items for Amazon, you’ll have to choose which of these strategies makes the most sense.
Many people will try to convince you to start with wholesale or private labeling. Wholesaling involves partnering with existing brands and their distributors to get bulk orders of their products to sell. Private labeling involves having products manufactured with your own brand on them.
The big appeal to these strategies is the potential return and the minimal time requirements once you have everything set up and running. The problem with these strategies is that they take a lot more experience and capital to get started with.
So while I think it makes sense to use these strategies, I also think it makes a lot more sense to start with retail arbitrage and work your way up to them as you gain the experience and capital necessary.
There is no barrier to success with retail arbitrage except the investment of your time. If you are willing to do that, retail arbitrage offers a clear path to developing the experience and capital needed for wholesale, which in turn prepares you for developing brands of your own.
This is the essence of my Stairway to 7 Figures methodology:
When others tell you that you skip ahead to the higher-level strategies and that it will be easy, be skeptical!
How to Get Started With Retail Arbitrage
To quickly recap, retail arbitrage is one of the best ways to get started selling on Amazon, as the initial investment is low, it allows you to learn the process, and there is a good deal of money to be made.
The experience gained through retail arbitrage also provides extensive knowledge about how selling on Amazon works, which can be applied to other inventory sourcing methods in the future.
To go started with retail arbitrage, you need to set up your seller account so that you can have access to the Amazon Seller App. As discussed above, this will provide you with the information that you need to see if an item is worth buying to resell.
After you have the app installed, go to a local big box store in your area. Wal-mart, Target, Home Depot, Toys R Us, Kmart, Walgreens, or any similar store will work. Once you are in a store, look for a clearance section or aisle similar to this:
This example shows a Walmart clearance aisle. Once you are in this aisle you want to open the Amazon Seller App, and use your phone’s camera to scan the barcode of the products in the clearance aisle.
After scanning a product, you should see a screen like this:
On this screen, you want to check for 2 things. The first is to make sure you are eligible to sell the product on Amazon under the selling eligibility section. The second is the sales rank shown in the top left-hand corner.
On this particular item, we can see that the sales rank is 60 in the toys category, which is an exceptionally good rank. The sales rank is a piece of information that Amazon provides that gives us an idea of how fast an item is currently selling on Amazon.
A full discussion of sales rank is beyond the scope of this post, but it’s important to know the lower the number the better. For your first few trips, I’d recommend looking for sales ranks that are lower than 250,000. As you gain more experience you can definitely tweak this, but ranks under this range are a good starting point.
If the app shows that you are eligible to sell the item, and the rank is less than your threshold, then you want to check and see if the item will provide a desirable return on investment.
To do that, click on the arrow on the far right of the app in the “gross proceeds” section. Once you do that you will see a screen like this:
You will be able to enter the selling price, your cost per pound to ship to Amazon (I use $0.50/lb), and how much you can purchase the item for. In this example, I’m showing that I can buy this item for $10.
At this stage, there are 2 quick checks that you want to go through. The first is to see if the net profit number shown at the bottom is higher than your minimum profit threshold. Typically I recommend setting this at around $3 per unit. This means that you won’t buy any items that you will make less than $3 in profit on. Having a potential net profit of less than $3 per unit does not allow for very much upside and a small drop in price can wipe out your profit.
If the item meets your minimum profit threshold, then you will want to calculate a return on investment percentage. You can do this by dividing the net profit by the cost of the item. In this case, it’s $7.13 divided by $10, so the return on investment percentage is 71.3%.
When you are first getting started selling on Amazon, I recommend looking for items with a return on investment percentage that is higher than 50%.
So this particular item meets all of the criteria for purchasing the item and it should be purchased. For any item that fits all of the purchasing guidelines, I recommend purchasing up to 6 of the item. In this example, if there were 6 copies of this game on the shelf for $10 each, then I would buy all 6 of them.
Then it’s time to repeat this process on the next item, and the remainder of the items in the clearance section. When you are first getting started, I recommend scanning as many items as possible. As you gain more experience, you will likely be able to avoid scanning certain items that don’t appear viable for resale. When first getting started though, I recommend scanning as many items as possible.
I recommend going through the process of determining if an item is viable for resale in the order mentioned so that you can quickly move on to the next item for any items that don’t fit your buying criteria. As soon as you see that an item doesn’t fit one of your criteria, move on to the next item.
Before long, you will find an item that fits your guidelines and you are eligible to sell – and you’ll officially have your first item to sell!
Once you start finding products, a good way to make sure you find even more is by joining our BSL BOLO group. This is a group dedicated to sharing profitable retail arbitrage finds with each other, including the exact products, stores, and profitability.
All members are required to share at least one qualifying deal each month, so you should have a good grasp of how to find products on your own before joining. Once you do, this group is a great way to maximize the amount of products you are getting each time you go sourcing.
How do I price the items I am selling on Amazon?
Now, that we have some items that we want to sell on Amazon, we need to know how to price them. When selling on Amazon using the Fulfillment by Amazon program, I recommend pricing at a similar level to the other Fulfillment by Amazon sellers on the listing.
Let’s take a look at an example (click to enlarge):
To get to this screen, view all of the available offers for the product. This can be done by clicking the link that says “used & new (#) from” that will display on just about every product for sale on Amazon. The # field will be filled in with the number of sellers on that particular listing.
Now for the screenshot above, you can see that I filtered the view for only prime eligible items and items in new condition. I recommend filtering the view to match the condition and fulfillment method of the item you are pricing.
For the item in the screenshot above, I recommend pricing between $41 and $41.41 if you are looking for a quick sale.
When pricing your items, I do not recommend pricing below the offers you are competing with. Pricing below your competition can often start a chain reaction of lowering prices and can quickly erode margins.
On the more aggressive side, I recommend matching the lowest price of the same fulfillment method.
On the more conservative side, I’d price between $0.01 and 1% higher than the lowest price of the same fulfillment method.
As a bit of a side note, if you are willing to wait a while for the item to sell, I would price the item between $46.52 and $49.95 in this example. The reason for this is there are a few different “gaps” in the prices these items are selling for. Whenever I am pricing an item, I will look for significant gaps in price between the offers, and if there’s a decent gap, then many times I will price at the higher end of the spectrum to see if I can make some additional margin on the product I am selling.
Pricing is something that you will definitely get a better feel for as you gain more experience selling on Amazon, but these general guidelines should be a good starting point.
How do I list my items for sale and ship them to Fulfillment by Amazon Warehouses?
Listing your products for sale and getting them sent into Amazon warehouses is your next step once you have sourced your first products.
This step overwhelms many people, but it’s actually very easy once you’ve done it once.
When you have sourced your first products and are ready to send them in for FBA, this post will teach you everything you need to know to do that. It’s generally easier to follow when you actually have a product you are ready to list, so I’ve kept this information in a separate article rather than in this post.
Launching Your Business…
This has been a very long post – if you’ve stuck around and read it all, it’s clear to me that you have a strong desire and motivation to start a business.
Whatever is motivating you to want to make this change, I strongly encourage you to commit to taking action as soon as possible. Reading a single post is not enough. Planning on trying some stuff later is not enough.
Achieving the progress you are after requires change – and the first thing you’ll need to change is your own habits. Do not procrastinate – doing so will just lead to being in the same spot you are now a year or two down the road.
The best next step is to watch that free presentation I mentioned earlier on the 7 keys to building a 7 figure business where you’ll learn more about the Stairway to 7 Figures and the rest of the strategies I’m using to continue to grow my own online retail business.
I get a lot of emails and messages from people who tell me they either want to try this and don’t know what to do or that they’ve started trying it but got stuck. When I ask if they’ve watched this presentation or taken any of my courses, 9 times out of 10 the answer is “no.”
The path forward is simple i(f you will allow it to be) yet difficult (because it takes a lot of time and effort). There is no good reason to make it complicated too – I’ve already traveled the road you are interested in, and I’m willing to share all of the things I’ve learned – and most of them for FREE!
So if you haven’t done so yet, please watch the presentation! You can do so here.
Once you do that, there are a variety of other training programs and services I offer like the BSL BOLO group and Online Retail Pro, an in-depth course where I share every last tip and tactic I have to offer.
These are great ways to grow your business faster and bigger, but the most important thing is that you start.
Depending on your situation, that may mean taking on the flipping challenge, following the instructions in this guide, or enrolling in advanced training and coaching – but the most important thing isn’t how you start, it’s that you start in the first place. If you do that and commit to being successful, everything else has a knack for falling into place.
Throughout this post, we’ve covered the bulk of what it takes to start selling on Amazon. I’d like to close with a few tips and thoughts that I think may help you based on my experience going through the process before.
The first thing that I would say is that if selling on Amazon sounds good to you, commit to giving it a shot as soon as possible.
You can test the retail arbitrage strategies that are laid out in this post in just a few hours, and going through that process should be eye-opening. Some people love it, and others can’t stand it. If you dedicate a few hours to it, you’ll know how you personally respond.
There’s no reason not to try this week.
The other main thing that I would say is to set realistic expectations. Selling on Amazon, particularly via retail arbitrage, takes some work on the front end. If you are going to go for it, be willing to put in the necessary work. The effort can definitely pay off.
Hopefully, this post has answered most of your questions about how to sell on Amazon and gives you a better idea of what selling on Amazon really means. Although this post is pretty comprehensive, it’s likely you still have more questions.
Let me know in the comments below, what other questions do you have about selling on Amazon?